Agenda item

To receive an update report on the audit of the draft Statement of Accounts 2021/22 (copy attached).

The Lead Member for Finance, Performance and Strategic Assets introduced the report (previously circulated). The Committee had delegated responsibility to approve the audited accounts which was hoped to have been presented to the committee on 8^th March 2023. This had not proved possible and the report provided the reason.

The Head of Finance added the report provided an update to members were the process was up to. He highlighted the close working relationship with Audit Wales, and was pleased that an agreed approach to finalise the accounts had been reached.

He stressed the issues raised had been in relation to two separate reserves, in the unusable reserve note in the Statement of Accounts. He reminded members that the unusable reserves were reserves that did not impact the financial standing of the Council as a publically funded body.

Members were provided with some history and reasons why the papers were delayed.

Members heard there were two issues, one being a change to the Accounting Code that had been implemented in a way which should have implemented differently. Officers accepted the alternative implementation was the correct method and was in agreement to make the necessary changes.

The other issue that had been raised was around the method the council accounted for council house dwellings. The asset register listed each house, but the method adopted when calculating the in year spend had been on the asset type level. This was highlighted by Audit Wales and requested the asset register be amended. An issue had aroused when looking at the data, not having historic management information to assign assets accurately historically to 2007/08. Once an agreed approach had been reached to apportion those costs back to 2007/08. When officers began this approach it became clear that there were no accompanying working papers to the asset register that far back. Following further discussions with Audit Wales it was agreed to go back as far as 2016/17. Members heard 2016/17 had been the last time Council dwellings were fully revalued.

The Head of Finance stated since writing the report, officers had internally completed the work. It would be presented to Audit Wales for discussion and to ask if they want sight of that work. It was hoped that accounts could be progressed following those discussions to be presented to the committee in September 2023.

He offered his thanks to Audit Wales for the continued close working and support in completing the work. It was stressed that due to the additional work on the Statement of Accounts 2021/22, Finance officers were behind on other projects.   

The Audit Wales representative Mike Whiteley, thanked the Head of Finance and his officers for the discussions and challenges during meetings. It was important that officers felt able to ask and challenge opinions and judgement. In his opinion he agreed the joint working had been positive.

He stressed to members the aim to complete the 2022/23 work by November/December 2023 was consistent with all other Welsh Authorities.

It was suggested by members that a note be circulated to members following the meeting on the knock on effects, on the severity and the timeframe of the potential consequences on the delay.  A quick update email could be circulated to members for information.

Members heard that Denbighshire was currently the last authority to resolve this current issue. Similar issues had been raised and resolved in other authorities over previous years.

The Audit Wales Representative informed the committee, Audit Wales had looked at the issues in previous years. Audit Wales audited a sample of the accounts. Particular circumstances for this year had been the valuation uplift, that uplift of properties identified this specific issue.

Audit Wales were in agreement that the September deadline was achievable.

The Head of Finance stressed due to Welsh Government changes, no Welsh Authority had accounts authorised before January 2023. He stressed the plan of work going forward enabled him to make arrangements around the deadline dates.

On behalf of the Committee, the Chair thanked all officers for the assurance provided on the work completed and the work ongoing. Members were reassured that other than the issued discussed Audit Wales had not raised any other major concerns.

The Head of Finance stated he was happy to discuss concerns with members or the public if any questions were raised.

Members were reminded that the Annual Governance Statement was included in the Draft Statement of Accounts which had been published. There had not been any changes to the Annual Governance Statement.

The Audit Wales Representative stressed if it was published without the Statement of Accounts it would have to be unaudited at that stage.

RESOLVED, that members note the update report.